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Wednesday, September 21, 2011

ASIA-Shares seen cautious ahead of key U.S, euro news

WELLINGTON: Asian stocks are set for a cautious start on Wednesday with investors sitting on the sidelines ahead of a possible move by the U.S. Federal Reserve to offer more economic stimulus and further talks by Greece with lenders.

Helping temper some European debt worries, Greece on Tuesday promised further cuts to its public sector before a second conference call with international lenders, whom Athens must persuade to extend more loans to avoid bankruptcy next month.

At the end of its two-day meeting later on Wednesday, the Fed is expected to announce plans to intervene in the bond market to push long-term interest rates -- already near historic lows -- even lower in a move known as Operation Twist.

U.S. stocks ended little changed on Tuesday. In the lowest volume session since late August, the market gave up earlier gains of about 1 percent with investors wary after an overnight downgrade of Italy's credit rating.

Standard and Poor's downgraded its unsolicited ratings on Italy by one notch to A/A-1 and kept its outlook on negative, a major surprise that threatens to add to concerns of contagion in the debt-stressed euro zone.

Asian stocks listed on Wall Street fell 0.6 percent while world stocks, as measured by the MSCI world equity index ''rose 0.4 percent.

Japanese markets are seen flat, after falling 1.6 percent on Tuesday to below the 25-day moving average. Nikkei futures in Chicago last traded down 0.6 percent to be five points below the last close in Osaka.

Australian stocks, which closed 1 percent lower on Tuesday, may open firmer on Wednesday, as stock index futures up 0.8 percent to a 38.8-point premium to the close of the underlying S&P/ASX 200 index. ' Reuters